Question by DAVID L: For the Foreign Income Exclusion, do any days of the physical presence test need to be within the tax year?
I am living in Argentina for an undetermined period of time.

1. For the Foreign Income Exclusion, do any days of the physical presence test need to be within the tax year?

2. If not, can I reuse the same physical presence 12 month period over and over (from year to year) as long as I live in Argentina?

Best answer:

Answer by v b
Yes and yes.

Let’s say you move to Argentina from June 2007 to November of 2008.

June 2007 to June 2008 is your first 12 month window. You must show you were physically *in* Argentina for 330 days out of the 12 months. You then prorate the exclusion–eg, add in the Argentina income and exclude 7/12 of the annual K amount.

For 2008, you first look at 1/1 to 12/31 to see if you can meet the 330 day test. If you can’t, we back up and check November 2007 to November 2008. If you pass that, you can exclude 11/12 of the amount.

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